Alliance Nickel is pursuing capital cost savings at its NiWest Nickel-Cobalt Project through vat leaching trials while reporting promising gold assay results from initial drilling at Australia United. A $4.15 million entitlement offer aims to fund these efforts amid ongoing offtake renegotiations with Stellantis.
- Capital cost optimisation program exploring vat leaching to reduce water infrastructure spend
- Initial gold drilling at Australia United returns encouraging high-grade intercepts
- Non-renounceable entitlement offer launched to raise approximately A$4.15 million
- Stellantis terminates binding offtake agreement but remains a significant shareholder
- NiWest Project retains Major Project status with a 35-year mine life and strong ESG profile
Vat Leaching Study Could Slash NiWest Capital Costs
Alliance Nickel Limited (ASX:AXN) is targeting significant capital cost reductions at its flagship NiWest Nickel-Cobalt Project by investigating vat leaching as an alternative to the heap leaching process outlined in its 2024 Definitive Feasibility Study (DFS). Early scoping work suggests this shift could dramatically cut water infrastructure costs, which currently account for around A$310 million of the total A$1.65 billion capex estimate.
The vat leaching process operates at atmospheric temperature and pressure, aligning with the existing DFS design basis, but preliminary analysis indicates it could allow local water sourcing from the Mt Kilkenny tenement, removing the need for extensive water infrastructure. Alliance is collaborating with hydrometallurgical experts to complete the study, which also hints at potential improvements in metal recovery and acid consumption.
This capital cost optimisation program follows previous announcements and builds on the robust DFS, which positioned NiWest as a low-cost, long-life project with a 35-year mine life and an average annual production of around 20,000 tonnes of contained nickel and 1,600 tonnes of cobalt. The project’s strong ESG credentials and first-quartile All-In Sustaining Cost (AISC) ranking underpin its competitive edge.
Encouraging Gold Assays at Australia United
In parallel with nickel-cobalt development, Alliance has reported promising initial results from a 10-hole reverse circulation drilling program at the Australia United tenement in Western Australia’s Eastern Goldfields. Highlights include intercepts of 3 metres at 3.2 g/t gold from 34 metres (including 1 metre at 8.1 g/t) and 3 metres at 3.2 g/t gold from 68 metres, confirming the prospectivity around historical underground workings.
Mineralisation remains open along strike and at depth, supported by positive grab samples from nearby tailings and spoil heaps. The company recommends further drilling to expand the resource and advance towards a JORC-compliant Mineral Resource Estimate. Discussions are underway for a potential earn-in deal where a third party would fund exploration and development in exchange for a stake or royalty, with Alliance retaining an ongoing interest.
These results build on the company’s recent exploration updates and are part of a broader strategy to diversify its resource base. The initial drilling success was detailed in a recent update, highlighting the potential for gold to complement the battery metals focus at NiWest.
Funding and Strategic Partnerships
To support its ongoing work programs, Alliance launched a non-renounceable entitlement offer in early April aiming to raise approximately A$4.15 million at $0.035 per share. Major shareholder Zeta Resources Limited and company directors have committed to take up about 49% of the offer, injecting around A$2 million. Funds raised will primarily back the capital cost optimisation program and general working capital needs.
Meanwhile, Stellantis N.V., a key strategic partner and 11.5% shareholder, formally terminated its binding offtake agreement in December 2025 due to unmet contractual milestones amid challenging nickel market conditions and financing hurdles. However, Stellantis has expressed continued interest in NiWest and is open to renegotiating terms that better reflect the current market and project timeline. The company remains engaged in these discussions, underscoring Stellantis’ ongoing commitment to securing critical minerals supply for electric vehicle production.
Project Status and Market Dynamics
NiWest maintains its designation as a Major Project under the Australian Government’s framework, facilitating streamlined approvals and government access. The project’s 35-year mine life and updated Ore Reserve of 84.7 million tonnes at 0.94% nickel and 0.06% cobalt underpin its long-term viability.
Nickel prices remained volatile in the March quarter, with the Indonesian government curbing its 2026 nickel ore export quota, yet global supply surpluses continue to exert downward pressure on prices. Alliance remains cautiously optimistic about the long-term demand fundamentals for Class 1 nickel and cobalt, supported by the global electric vehicle transition and recent US-Australia critical minerals agreements.
Alliance’s cash position stood at A$646,000 at quarter-end, supported by a fully drawn unsecured loan facility of A$5.2 million. The company reported exploration expenditure of approximately A$419,000 during the quarter, focused on regulatory and tenement costs, with no mining development or production activities undertaken. Directors’ remuneration payments amounted to A$98,000.
This update follows earlier reports on Alliance’s efforts to optimise NiWest’s economics through vat leaching and its initial gold drilling success at Australia United, reflecting a multi-pronged approach to value creation amid market headwinds. The company’s recent entitlement offer to raise A$4.15 million is a critical step in funding these initiatives.
Bottom Line?
Alliance Nickel’s vat leaching study and gold exploration progress are promising, but the success of its entitlement offer and offtake renegotiations will be pivotal for advancing NiWest’s development.
Questions in the middle?
- Will vat leaching deliver the anticipated capital and operational savings compared to heap leaching?
- How will the outcome of ongoing offtake negotiations with Stellantis shape NiWest’s financing and development timeline?
- Can further drilling at Australia United confirm a resource that materially enhances Alliance’s project portfolio?